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Cryptocurrency Scams: How to Spot Them, Report Them, and Avoid Them

Cryptocurrency scams can take many forms. Similar to the money in your bank account, scammers want your crypto and will do anything they can to get it. To protect your crypto assets, it helps to know when and how you’re being targeted and what you can do if you suspect that a cryptocurrency and communications related to it are a scam.

Types of Cryptocurrency Scams

Generally speaking, cryptocurrency scams fall into two different categories:

  1. Initiatives aiming to obtain access to a target’s digital wallet or authentication credentials. This means scammers try to get information that gives them access to a digital wallet or other types of private information, such as security codes. In some cases, this even includes access to physical hardware.
  2. Transferring cryptocurrency directly to a scammer due to impersonation, fraudulent investment or business opportunities, or other malicious means.

Social Engineering Scams

For social engineering scams, scammers use psychological manipulation and deceit to gain control of vital information relating to user accounts. These scams condition people to think they are dealing with a trusted entity such as a government agency, well-known business, tech support, community member, work colleague, or friend.

Scammers will often work from any angle or take as much time as they need to gain the trust of a potential victim so that they reveal keys or send money to the scammer’s digital wallet. When one of these “trusted” entities demand cryptocurrency for any reason, it is a sign of a scam.

Romance Scams

Scammers often use dating websites to make unsuspecting targets believe they are in a real long-term relationship. When trust has been granted, conversations often turn to lucrative cryptocurrency opportunities and the eventual transfer of either coins or account authentication credentials. The Federal Trade Commission (FTC) found that approximately 20% of the money reported lost in romance scams was in cryptocurrency.

Phishing Scams

Within the context of the cryptocurrency industry, phishing scams target information pertaining to online wallets. Specifically, scammers are interested in crypto wallet private keys, which are the keys required to access cryptocurrency. Their method is like many standard scams—they send an email with links that lead holders to a specially created website and ask them to enter private keys. When the hackers have this information, they can steal the cryptocurrency.

Imposter and Giveaway Scams

Many crypto owners are being contacted by impersonators claiming to be from cryptocurrency exchange support and security.

Moving down the sphere of influence, scammers also try to pose as celebrities, businesspeople, or cryptocurrency influencers. To capture the attention of potential targets, many scammers promise to match or multiply the cryptocurrency sent to them in what is known as a giveaway scam. Well-crafted messaging from what often looks like an existing social media account can often create a sense of validity and spark a sense of urgency. This mythical “once-in-a-lifetime” opportunity can lead people to transfer funds quickly in hopes of an instant return.

How to Spot Cryptocurrency Scams

Cryptocurrency scams are easy to spot when you know what you’re looking for. Legitimate cryptocurrencies have readily available disclosure, with detailed information about the blockchain and associated tokens.

How to Avoid Cryptocurrency Scams

There are several actions you can take to avoid being scammed. If you notice any of the signs, you shouldn’t click on any links, dial a phone number, contact them in any way, or send them money. Additionally:

  • Ignore requests to give out your private cryptocurrency keys. Those keys control your crypto and wallet access, and no one needs them in a legitimate cryptocurrency transaction.
  • Ignore promises that you’ll make lots of money.
  • Ignore investment managers who contact you and say they can grow your money quickly.
  • Ignore celebrities—a celebrity will not contact people about buying cryptocurrency.
  • Meet your romantic interests in person before giving them money if you’re using an online dating website or app.
  • Ignore text messages and emails from well-known or new companies, saying your account is frozen or they are worried about it.
  • If you receive an email, text, or social media message from a government, law enforcement agency, or utility company stating that your accounts or assets are frozen, and that you’ll need to send crypto or money, contact the agency and ignore the message.
  • Ignore job listings to be a cash-to-crypto converter or crypto miner.
  • Do not fall for claims about explicit material they have of you that they will post unless you send cryptocurrency, and report it.
  • Don’t accept “free” money or crypto.

How to Report Cryptocurrency Scams

Several organizations exist that can help you if you’re a victim of a cryptocurrency scam or suspect one. Use their online complaint forms to seek help:

You can also contact the crypto exchange you use. They might have fraud prevention or other measures in place to protect your crypto assets and money.

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